Ensure that you have HTC Sync installed.
1. Turn on your phone while holding the volume down button.
2. You will see HBOOT on the screen.
3. Use the volume buttons to move up and down and power button to select the RECOVERY option.
4. You will now see a red triangle on the screen, at this point plug your phone into your PC via your microUSB cable.
5. Double click on recovery-windows.bat inside this
pushfiles_windows.zip folder (unzip to Desktop).
6. Using the optical trackpad select Partition sdcard > Partition SD
7. Select SWAP=0, EXT2=512 and allow the rest to be FAT32.
8. Select the SD:ext2 to ext3 option in this menu.
9. Go back to the Recovery Console main menu and select Reboot system now. While rebooting, unplug the Desire from the USB port.